(Reuters) – Canadian pot producer Tilray Inc (TLRY.O) reported a bigger quarterly loss on Tuesday, as it ramped up investments to boost production in an attempt to grab a larger share of the nascent cannabis market and expand internationally. The company’s cost of sales, or the cost related to pot production and its supply, rose more than six-fold to $33.6 million in the second quarter from a year earlier. Shares of the company were down 2% after the closing bell. The results came on the back of increasing demand in the Canadian cannabis sector, which has faced supply constraints. Canada became the first G7 country to legalize recreational marijuana in October but sales have been dampened by supply constraints and prices that are higher than those on the black market. The larger players such as Canopy Growth (WEED.TO) and Aurora Cannabis (ACB.N), and Tilray have spent heavily to bridge the supply-demand gap, often resulting in bigger losses, spooking investors waiting for any sign of profitability. Tilray said total kilogram equivalents of cannabis sold in the second quarter surged nearly 270% to 5,588 kg, while average selling price per gram fell to $4.61 from $6.38 a year earlier. The company’s net loss widened to $35.1 million, or 36 cents per share, in the quarter ended June 30, from $12.8 million, or 17 cents per share, a year earlier. Excluding items, the company posted a loss of 32 cents per share, it said. Analysts on average had expected a loss of 25 cents, according to IBES data from Refinitiv. Revenue rose to $45.9 million from $9.7 million, beating the average analyst estimate of $41.1 million.